CGU Alumnus Looks at Hormone Levels, Overconfidence

Economics Professor Paul Zak holds a brain in his lab, the Center for Neuroeconomics Studies.

Testosterone Troubles

How much do hormones affect decision-making? A great deal, reports a New York Times article on the impact of testosterone levels on judgment and risk-taking. The article looks at the connection between overconfidence and hormone levels; in particular, that men’s “hubris could be tied to testosterone levels.”

The article also highlights the research of CGU alumnus Amos Nadler (PhD, Economics, 2013) and other neuroeconomists, including his mentor Professor Paul Zak, in examining the behavior of stock traders and how testosterone levels affected their financial decisions in a simulation of the stock market. The result? Not good.

“Men with boosted testosterone levels significantly overpriced assets … and … were slower to incorporate data about falling values into their trading decisions,” the article continues. Zak, who directs CGU’s Center for Neuroeconomics Studies, was thrilled to see coverage of his former student, whose intriguing research he proudly says “was done in my lab.”